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Monday August 30, 2010
Fidelity Healthcare (FSPHX): 'Global growth story'
by Jim Lowell, editor Fidelity Investor  Fidelity Select Health Care (FSPHX) is our latest Fidelity fund spotlight feature.The fund continues to be a clear market overweight position for our fundamentally-driven portfolios. So far this year, manager Eddie Yoon is returning a shade less than that of the S&P 500; but I don't double him or my premise for holding his fund. 
Of the 2,515 days in the market as measured by the S&P 500 over the past decade, there were 1,189 down days. During those down days, Select Healthcare lost less than the S&P 78.6% of the time. Over the past decade, while the S&P 500 lost 7.3%, this fund gained 19.5%. Since taking over the fund in October 2008, Yoon has returned 5.8% vs. a loss of 5.1% for the S&P. Investing in the gamut of healthcare options make sense: pharmaceuticals, biotechnology, medical equipment and systems, and HMOs. The trumped up political crisis that has engendered a rush to 'cure' our healthcare system has done little to dent the fundamental reasons for keeping a core holding in healthcare. These reasons remain earnings growth, demographics, and innovation. There's a stealthy global market growth story here; emerging market demand for more and better healthcare is increasing. Foreign stocks make up 9.7% of the holdings. In addition, the companies that aren't listed as foreign derive increasingly greater amounts of revenue from the burgeoning global marketplace. Yoon's top ten holdings are Medco Health Solutions, Merck, Express Scripts, Illumina, Pfizer, Allergan, Covidien, Bard, Biogen Idec, and Valeant Pharmaceuticals. Learn more about this financial newsletter at Jim Lowell's Fidelity Investor. |
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